A lot of people are going to lose their Jobs to coronavirus. Do you agree?

As Ravi Venkatesan calls this it could be a “Mass extinction of enterprises and jobs.”

Although a pessimistic outlook, but this is what it could be should the situation persist for 2-3 months. Not just a lot of employees, but also organizations could go under. “Point that is really terrifying is that you can see companies like Boeing & Mcdonalds go down,” mentions Ravi Venkatesan in another excerpt of a podcast series Outliers

Coronavirus was diagnosed in 885,924 people & has already claimed 44,220 lives across the globe. The mayhem of Covid19 is going to go beyond just lives and it is going to take away a lot of Jobs & businesses as well.

In India, the country has gone into lockdown and a lot of employees are already asked by their employers to take a sabbatical from work. Let us look at some examples

  • Tourism & Hospitality Sector: “Tourism industry in India is staring at bankruptcies, closure of businesses and mass unemployment. Seventy percent out of a total estimated workforce of 5.5 crores (direct and indirect) could get unemployed” according to The Federation of Associations in Indian Tourism & Hospitality
  • Aviation Industry: In words of Ronojoy Dutta, CEO, IndiGo “I cannot think of another crisis that has engulfed the entire world with its speed and penetration into the lives of every single human being on this planet”
  • Retailers, Automobile Industry, Restaurants & the Entertainment Industry:  Since these industries have huge Fixed Costs, a lot of them could face really tough times going forward.
  • While the Covid has killed the demand for a lot of Jobs temporarily, the industries that depend on Blue Collar employees would feel the heat even after the demand is restored due to the vast movement of manpower.
  • A lot of companies could take decisions that can be difficult in the short-term, but necessary in the long-term. Smaller organizations would have to layoff staff and put hiring on freeze to save their balance sheets. Payment cycles for all business would be affected due to the lockdown.
  • Small service businesses OR Businesses that operate on narrow margins would be the worst hit. Look at the gravity of the situation from the perspective that MSME’s employ ~ 110 crore individuals & adds 1.3-1.5 Cr Jobs annually. Can you imagine the impact?
  • The economic slowdown was already affecting businesses negatively. Oyo recently laid of 2000 employees, Zomato 500. The Coronavirus pandemic could be final nail in the coffin, as Barclays estimates that the lockdown could bring the growth down to 2.5%. Overall, this would affect the spending capability of the citizens & could worsen the situation. In the words of our honorable Prime Minister, Mr. Narendra Modi this pandemic has the potential to move us behind decades.
  • A lot of companies would resort to hiring freezes. While numbers from India might not be accurately available, Goldman Sachs estimates that the Jobless claims in the USA could be 4 times the maximum of what they were during the 2009-2010 recession. What should also be noted is the comparison of Healthcare Facilities per capita in India Versus that in the USA to fight the pandemic. 
  • While the situation is not all gloomy a lot of Jobs could be created in AI, Data Science, Robotics, Automation & healthcare. A lot of us would have to upskill to keep up with the pace of the change

The good thing could be this quote by Friedrich Nietzsche What Doesn’t Kill You Makes You Stronger !!

What do you think about the impact Covid19 could cause?

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